EURELECTRIC calls for prioritising Cost-Effectiveness & Flexibility in Energy Efficiency Directive review

01 February 2016

In its response to the European Commission’s public consultation on the review of the Energy Efficiency Directive, EURELECTRIC reaffirms that it considers the Energy Efficiency Directive as the essential piece of EU legislation for energy efficiency due to its multiple angles, in particular on metering and billing provisions, buildings and demand response. It will be crucial to take into consideration the key lessons learnt from the implementation of the current Directive in the review process. One such lesson relates to the impact of overlapping policy tools and their effect on the main market instrument to decarbonise the European economy (the EU ETS), a problem which EURELECTRIC believes must be addressed in the review of the Directive.

 “A crucial factor in the review of the Energy Efficiency Directive review is the effectiveness in terms of cost and CO2/energy reduction, in order to find the most cost-effective approach,” said EURELECTRIC Secretary General Hans ten Berge. “This must, on the one hand, translate into an ambitious signal that energy efficiency is taken seriously, and on the other hand, lead to a realistic calculation where costs and benefits begin to diverge from each other. We must ensure that the revised Directive allows for the necessary flexibility in achieving our ambitions.”

A key question in the consultation asked whether Article 7 of the current Directive (relating to energy efficiency obligation schemes or alternative measures) forms an effective instrument to achieve final energy savings. In its response, EURELECTRIC states that the flexibility element (allowing alternative measures) under this Article has played a very positive role in allowing Member States to identify and tackle national challenges in the efficiency context. EURELECTRIC generally considers this mechanism an adequate tool for improving energy efficiency across the EU as it increases Member State ambitions for energy efficiency policy goals, while allowing the crucial element of flexibility needed to make it a successful policy in the vastly diverging environments. It is therefore important to maintain this flexibility in the future.

On the other hand, the European power industry takes a more cautious approach with regard to obligation schemes. These have often been implemented in conjunction with other (often social) policy tools (e.g. on energy/fuel poverty) which has, in some cases, led to very complicated and bureaucratic processes, undermining the overall effectiveness of the policy and its cost-effectiveness. EURELECTRIC also states that, as regards the future of the annual 1.5% final energy savings target, the required yearly energy saving percentage should reflect the needed ambition in order to achieve both the 2020, and the respective 2030, energy efficiency goals. However, in a number of cases, the rules concerning calculations and acceptable measures make it hard to reach the target for each year and it should therefore be reviewed.

In its response, EURELECTRIC also states that the Energy Efficiency Directive provisions on metering and billing are considered sufficient to guarantee all consumers easily accessible, sufficiently frequent, detailed and understandable information on their own consumption of energy. Energy bill design should not be dictated by regulation, as this runs counter to the objective of a competitive market in which retailers can tailor their offers and communication towards individual customer needs and preferences.

Background information: The European Council of October 2014 agreed on an EU objective of saving at least 27% of energy by 2030 compared to projections and requested the Commission to review the target by 2020 “having in mind an EU level of 30%”. The existing policy framework should therefore be updated to reflect the new EU energy efficiency target for 2030 and to align it with the overall 2030 Framework for Climate and Energy. This consultation was launched to collect views and suggestions from different stakeholders in view of the review of the Energy Efficiency Directive foreseen for the second half of 2016. 

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